Md. metropolitan economies still grow, but rural areas stalling, report says

April 22, 1995|By Kim Clark | Kim Clark,Sun Staff Writer

The Baltimore and Washington suburban economies will likely keep improving through 1995, but recoveries in Western Maryland and the Eastern Shore may have peaked already, an analysis by the University of Baltimore suggests.

Leading indicators for the state as a whole predict employment will grow by almost 1.5 percent, or about 32,000 jobs this year, mostly through hiring by service and retail companies, said M. Anirban Basu, an economist with the Regional Economic Studies Program, which released its study this week.

"The trend is up. Maryland is adding jobs," Mr. Basu said. "Employment might even hit its pre-recession peak by the end of the year."

Fueling the growth is improvements in the economies in the Baltimore metropolitan area and the Washington suburbs.

In Baltimore, the good news included a steady decline in the number of residents receiving public aid. The number of people receiving Aid to Families with Dependent Children has fallen 1.3 percent since its 1993 peak, the analysis found.

And consumers in the metropolitan area set post-recession spending records with their department store purchases late last year.

Herb Shofer, owner of Shofer's Furniture Co., said 1994 was the best sales year in the 60-year history of his Federal Hill store.

Although his profits didn't grow because of increased competition, he said, he added a few more workers, bringing the store's staff up to 40.

There are some economic clouds looming, however.

Economic growth in the rural parts of the state appeared to have stalled. Leading indicators for the Eastern Shore have been down for the last six months, and in Western Maryland the indicators have turned down after flattening last summer, the economists found.

And statewide, some signs of life last year in manufacturing appear to have been fleeting, Mr. Basu said. The indicators predict that the industrial sector will soon return to its old pattern of slow decline.

"We are a high-wage environment in Maryland, and we are losing jobs at McCormick, London Fog," he said. "Those are purely a cost issue. That's why we remain pessimistic about manufacturing."

The predicted loss of high-paying manufacturing jobs bodes ill for wage growth in the state, since the new jobs being created aren't, on average, particularly lucrative or stable. People are finding work in stores, such as Wal-Mart, or in warehouses, Mr. Basu said, and such jobs are a far cry from the $45,000-a-year Westinghouse jobs that have been eliminated in recent years.

But at least there are new jobs replacing the old, he said.

"People are not able to make the wages they made four or five years ago, But they might be making $11 or $12 an hour and are finding something to do. Previously, there was nothing."

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